California employment case index

The Ninth Circuit held the Federal Arbitration Act preempts AB 51 (Labor Code § 432.6), California's attempt to ban mandatory employment arbitration, because a state rule that burdens the formation of arbitration agreements stands as an obstacle to the FAA.

Citigroup let employees take part of their annual compensation as discounted restricted stock vesting only after two years; an employee who resigned early forfeited both the shares and the pay used to buy them. The California Supreme Court affirmed summary judgment for the company, holding that no earned wages remained unpaid on resignation. The decision agrees that restricted stock is a wage – so it turns on when incentive compensation is earned, not on characterization – and expressly refuses to extend Suastez's pro rata vacation-vesting rule to voluntary incentive programs.

In McDonald v. Santa Fe Trail Transportation Co. (1976) 427 U.S. 273, two white employees were discharged for participating in the theft of antifreeze from a shipment in their employer's care, while a Black employee charged with the same misconduct was retained. The Supreme Court held — unanimously as to Title VII, and seven-to-two as to 42 U.S.C. § 1981 — that both statutes protect against racial discrimination directed at any race, including white persons. An employer “may justifiably refuse to rehire one who was engaged in unlawful, disruptive acts against it, but only if this criterion is applied alike to members of all races.” The judgment dismissing the complaint was reversed and the case remanded.